[2021 Budget] Ministry of Industry, 11.1 Trillion Won Next Year... 44% Invested in Energy

Budget Set at 11.1592 Trillion Won, 18% Increase from This Year
Green New Deal Up 27%...Renewables 37%·Hydrogen 73%↑
Manufacturing Budget Expanded 11% Including Digital New Deal and SoBuJang 2.0...Exports Up 17%

President Moon Jae-in speaking at the 'Korean New Deal National Report Conference' held at the Blue House's Yeongbingwan on July 14. The Ministry of Trade, Industry and Energy plans to significantly increase the budget next year for the two pillars of the Korean New Deal: the 'Digital New Deal' and the 'Green New Deal.' (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The Ministry of Trade, Industry and Energy announced on the 1st that next year's budget will be 11.1592 trillion KRW, an 18% increase from this year's 9.4367 trillion KRW. A total of 44% of the budget will be concentrated on energy transition to new and renewable energy such as solar and wind power, and Green New Deal-related projects.

To strengthen the growth engine of the Korean economy, which has been contracted due to the novel coronavirus disease (COVID-19), efforts will be made to enhance manufacturing competitiveness, restore export vitality, and expand investment attraction.

Source: Ministry of Trade, Industry and Energy

The government allocated 4.8956 trillion KRW for the 'Green New Deal' budget, accounting for 43.9% of the total. This is a 26.9% (1.0385 trillion KRW) increase from this year's 3.8571 trillion KRW. The budget related to renewable energy such as solar and wind power expanded by 36.8%, from 1.2226 trillion KRW to 1.6725 trillion KRW.

Source: Ministry of Trade, Industry and Energy

Specifically, ▲ loans for solar power facilities for farmers, livestock farmers, and fishermen (2.284 trillion KRW this year → 3.205 trillion KRW next year) ▲ loans for solar power facilities on idle sites in industrial complexes such as factory roofs and parking lots (100 billion KRW → 200 billion KRW) ▲ loan budget for local residents' investments in nearby new and renewable energy projects (36.5 billion KRW → 37 billion KRW) were significantly increased.

A new budget of 50 billion KRW was allocated for 'Green Guarantee,' a loan guarantee for renewable energy companies. Green Guarantee is a project that helps companies with technological capabilities but weak collateral ability to secure funding.

To achieve the goal of becoming one of the world's top five offshore wind power countries, the budget for ▲ public-led large-scale offshore wind farm development (2.5 billion KRW → 7.5 billion KRW) ▲ offshore wind industry support (2 billion KRW → 7 billion KRW) ▲ establishment of a super-large wind power demonstration base (5.3 billion KRW → 11.3 billion KRW) was expanded more than two to three times.

Source: Ministry of Trade, Industry and Energy

The budget for fostering the hydrogen industry was also expanded by 72.5%, from 142 billion KRW to 245 billion KRW. Budgets were increased across all areas including hydrogen production (29.9 billion KRW → 56.6 billion KRW), distribution (newly allocated 3.6 billion KRW), promotion (newly allocated 3.3 billion KRW), and safety management (2.9 billion KRW → 7.4 billion KRW).

Additionally, more than 100 billion KRW will be invested in ▲ building a smart power platform for households (additional supplementary budget this year 28.2 billion KRW → 158.6 billion KRW) ▲ electricity supply projects in rural fishing villages (105.7 billion KRW → 137.3 billion KRW). Furthermore, about 300 billion KRW of new budget was allocated for support related to the Pohang earthquake.

Source: Ministry of Trade, Industry and Energy

Through the 'Digital New Deal' and the 'Materials, Parts, and Equipment 2.0 Strategy,' a countermeasure for the Global Value Chain (GVC), 4.6705 trillion KRW will be invested to enhance manufacturing competitiveness. This is an 11.3% (472.4 billion KRW) increase from this year's 4.1981 trillion KRW.

2.5611 trillion KRW will be invested in the Materials, Parts, and Equipment 2.0 Strategy budget, a 21% increase from this year's 2.0725 trillion KRW. The budget for the representative R&D project, the materials and parts industry technology development project, increased by 47.1%, from 602.7 billion KRW to 886.6 billion KRW.

Source: Ministry of Trade, Industry and Energy

Budgets for the Big 3 industries were also increased. Compared to last year, system semiconductors increased by 18%, biohealth by 32%, and future cars by 23% respectively.

In the system semiconductor sector, comprehensive support from semiconductor design companies (fabless) nurturing to product manufacturing will be strengthened. A new budget of 6 billion KRW was allocated to implement the 'Global K-Fabless Nurturing Technology Development' project. The budget for the biohealth 'Pan-government full-cycle medical device R&D' project increased by 99.3%, from 30.2 billion KRW to 60.2 billion KRW. A new budget of 20 billion KRW was allocated for the 'Autonomous Driving Technology Development Innovation Project.'

Source: Ministry of Trade, Industry and Energy

As part of the Digital New Deal, the digital transformation of manufacturing sites in key industries will be promoted. Specifically, the budget for 'Intelligent Robot Distribution and Expansion' increased by 30.4%, from 38.1 billion KRW to 49.7 billion KRW. The budget for the 'Industrial Complex Smart Manufacturing Advanced Workforce Training' project increased by 138.1%, from 14.7 billion KRW to 35 billion KRW. A budget of 12 billion KRW was allocated for the newly launched 'Autonomous Ship Technology Development' project this year.

Additionally, the budget for support programs exclusively for mid-sized companies increased by 53.7%, from 46.7 billion KRW this year to 71.8 billion KRW next year.

Source: Ministry of Trade, Industry and Energy

The export support budget is 1.4224 trillion KRW, a 17.2% (208.7 billion KRW) increase from this year's 1.2136 trillion KRW. The core is to increase the contribution to the trade insurance fund of the Korea Trade Insurance Corporation from 296 billion KRW to 400 billion KRW, a 35.1% increase.

Source: Ministry of Trade, Industry and Energy

To promote foreign direct investment (FDI), the cash support amount for foreign-invested companies was expanded by 9.1%, from 55 billion KRW to 60 billion KRW.

To revitalize the return of Korean companies operating overseas, the budget for the U-turn company exclusive subsidy, newly established through this year's supplementary budget, was increased by 150%, from 20 billion KRW to 50 billion KRW.

Source: Ministry of Trade, Industry and Energy

The budget to effectively respond to trade disputes and import regulations arising from Japan's export restrictions on three major items (EUV photoresist, fluorinated polyimide, and hydrofluoric acid) was also partially increased. The trade dispute response budget was expanded by 7.3%, from 23.3 billion KRW to 25 billion KRW.

Next year's Ministry of Trade, Industry and Energy budget plan and fund operation plan are expected to be finalized in early December after review by the National Assembly.

This content was produced with the assistance of AI translation services.